This application relates generally to online transaction processing. More specifically, this application relates to methods and systems that allow debit transactions to be performed as part of online transaction processing.
In recent years, there has been a steady increase in the use of the Internet for a variety of different business purposes, particularly as an alternative mechanism for performing commercial transactions. Such commercial transactions typically parallel more traditional nonelectronic transactions in that a customer may peruse an offering of goods and/or services and supply payment to purchase desired products. Because of the nature of electronic transactions, the variety of payment mechanisms that may be used have tended to be more restricted than what is available for traditional nonelectronic transactions. The most obvious example of a payment mechanism that is not accepted electronically is cash, with other examples including checks, money orders, and debit transactions. By far, the most common payment mechanism that has been used for electronic transactions is a credit-based mechanism in which the customer supplies an online merchant with a credit-card number. Upon verification of the status of the associated credit account, the merchant agrees to ship the requested goods, provides immediate access to online information, or performs some other service.
While the use of such a credit-based system is appropriate for a number of circumstances, it also suffers from certain disadvantages. One disadvantage in particular is that credit transactions are generally not guaranteed. That is, a merchant who accepts a credit card for payment takes a risk that the payment will never be received because the cardholder disputes the legitimacy of the transaction. This may happen, for example, in a number of different fraud circumstances, with the nonguaranteed nature of the credit transaction resulting in the merchant being the victim of the fraud.
This is in contrast to traditional debit-based transactions, which generally are guaranteed to the merchant because specific funds identified in an account are designated at the time of the transaction as being allocated to the transaction. There has long been a desire to implement such debit-based transactions in an online environment, but there have been a number of barriers to doing so because of the need to have greater authentication when providing a guaranteed transaction. Some attempts have been made to provide simulated debit-based transactions, notably with Paypal® and similar types of systems. In these types of systems, an account maintained by a service provider may hold funds that are received from a credit-based account or sometimes from a bank account, although such bank-account sources use traditional transfer mechanisms that typically take days until the funds are available. Once under the control of the service provider, these funds may be distributed to merchants by the service provider upon instructions from the customer.
While such systems provide a convenient mechanism for many customers to engage in electronic commerce, their primary advantage is in limiting the disclosure of credit-account information. They still do not allow customers to engage in actual debit transactions that access funds from a financial-institution account during a transaction. There remains a need in the art for methods and systems that allow customers to perform electronic debit transactions.